Basically, this budget revealed what we all knew already: that the British economy is in a deep hole and that the government has run out of fiscal tools to try to get us out of it. None of it matters all that much: the huge public borrowing requirement will, I suspect, be fundable; the 50% tax rate will not cause mass emigration of the better-off; the "car scrappage" scheme will not, as George Monbiot claims, increase carbon emissions.

But will any of it do any good? Not really.

The vast borrowing requirement is, in the end, going to be fundable because domestic institutions and individuals will buy more gilts. The need for foreign funding is declining. The reason for that, though, is bad: as individuals, we are saving more, so the institutions in which we plonk our savings are going to want gilts, as we aren't going to want our savings to be bet on equities; the banks and other institutions want to buy them because they have become risk-averse. In other words, the very fact that we are in trouble, spending less and saving more, is going to make this borrowing possible.

But in the longer term, it means that taxes are going to have to rise, a lot, and spending will have to be cut. The spending belt is already being tightened. Just as Barack Obama's budget means he is facing a long-term gap between his stated tax and spending plans of 4% of GDP, which will have to be filled somehow, so it looks likely that Britain's government will face a similar size gap – one that is larger than Alastair Darling has acknowledged. His forecasts of an early and quite vigorous recovery look outlandish.

The car scrappage scheme is a return to the worst feature of Gordon Brown's early budgets: pointless tinkering. It will, in fact, slightly reduce our carbon emissions, most likely, since older cars are more polluting, but it will not help the economy. It is likely just to divert spending from somewhere else. Congratulations to the car industry for successfully stealing money from other industries.

Overall, this budget was a statement of economic impotence from Labour, combined with an attempt to find a bit of political Viagra by taxing the undeserving rich. The rich won't bolt, the tax won't raise much more money, and Labour will still lose the general election.